Baucus’s successor reportedly will be Sen. Ron Wyden of Oregon. The second-ranking Democrat on the committee, John D. Rockefeller of West Virginia, is not seeking reelection in 2014, and Sen. Charles Schumer of New York, another possibility, has said he won’t seek the post. Wyden’s term might be short -- the GOP has an excellent chance to recapture the Senate in the fall -- but that doesn’t mean he won’t try to put his mark on tax legislation. And he should, because there is a lot that Finance can and must accomplish.
1. Tax Reform
Despite the roadshow with House Ways and Means Chair Dave Camp and the release of a batch of discussion drafts at the end of the year, Baucus didn’t really move the needle on tax reform. He had even less leadership support than Camp. Baucus’s discussion drafts, like Camp’s, excited tax reform observers and gave everyone a lot to talk about, but they are incomplete and have few public supporters.
Does that mean Wyden is starting from scratch? Not quite, but there still is a ton of work to do in the Senate. Fortunately for tax reform advocates, Wyden is an ideal choice to succeed Baucus. He is very interested in tax policy, and he has written his own tax reform bill -- a comprehensive plan that he cosponsored with former Sen. Judd Gregg and Sen. Dan Coats of Indiana. Baucus’s exit means that the small chance of tax reform in 2014 is gone, but that doesn’t mean there is nothing for the new chair to do. Wyden needs to hit the ground running and push Finance members to support or help tweak his tax reform plan. The Oregon senator could use 2014 to lay the groundwork for a more serious push in 2015, assuming Democrats hold the Senate for Obama’s last two years in office.
The mainstream press has spent much of the last week talking about the 50 tax provisions that expired at the end of 2013 and Congress’s failure to renew them. For those who follow the extenders every year, however, this is nothing new. Congress frequently fails to deal with them by the deadline, allowing many to temporarily lapse and then be extended retroactively. In that regard, this year isn’t all that different.
But there is a slight change to the dynamic because Baucus and Camp both refused to even mark up extenders legislation or hold committee discussions. They wanted to force lawmakers to deal with extenders as part of tax reform, but tax reform obviously didn’t happen. Now that the extenders have actually expired, both parties are starting to talk about a short-term extension.
And that means it’s up to Wyden to present a bill that renews extenders that should be renewed and allows others to lapse. Not all extenders are created equal -- many should be allowed to lapse permanently. If Wyden doesn’t show leadership on this issue, it’s likely that Congress will just robotically extend all of them, perpetuating the existing problems with efficiency and complexity.
3. EO Investigation
The Finance Committee hasn’t wrapped up its investigation into the IRS exempt organizations scandal. Baucus took a low profile on the issue, holding one hearing and ceding the spotlight to Dan Issa and Camp in the House. But there’s no reason for Wyden to continue that stance. The country would be better served by a balanced set of investigations. The public has a right to know the truth behind what happened at the IRS to allow such a tone-deaf application review and approval process to start and then continue for so long. Republicans would like to show that the White House ordered the targeting. The IRS and the administration would like people to believe that the scandal was confined to the Cincinnati office and a few low-level employees. The truth is somewhere in the middle, and the new Finance chair should do his best to uncover and report it.